Regional Food Hubs: Improving Market Access for Local Producers

USDA’s “Know Your Farmer, Know Your Food” (KYF2) Initiative was launched in 2009 to spur a “national conversation” on how to develop viable local and regional food systems and stimulate new economic opportunities. USDA Deputy Secretary Kathleen Merrigan oversees a “KYF2” task force with representatives from every USDA agency, which meets every 2 weeks to promote systems that promote local food system development. Food hubs are one way to fulfill this mission. Food hubs are "A business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand." They collect enough food from small farmers to be able to sell it wholesale to retailers and other customers. The food they sell is often specially branded as "organic" or "local" or "natural." The paper describes the working of several food hubs as examples of different business models. A survey of 45 food hubs gave a picture of how they operate: • 60 percent have been in business for less than 5 years. • Average sales were close to $1 million a year. • Most were started by private entrepreneurs. • The average number of employees was 12, with 5 volunteers. • The median number of suppliers was 40. • About equal numbers were cooperatives, for-profit, and nonprofit, with 17% being public. Their number has grown from 47 in 2000 to 197 in 2011. Regional food hubs fill a market need not addressed by the current distribution system: they collect food from small and mid-size farms to sell locally.